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Biomass Supply Module

This Stochastic Energy Deployment System (SEDS) module generates a supply curve for biomass, with price as a function of availability, total demand, changing over time.

Focus of Analyses

This module focuses on generating a biomass supply curve given the biomass feedstock price as a function of volume and time. The goal of this analysis is to generate biomass price estimates as a function of feedstock demand. It takes as inputs the biomass supply curve estimates generated from POLYSYS, i.e., total biomass in million (dry) tons per year, summing over all included feedstocks, and generates biomass price estimates as a function of demand.

Overview of Methodology

The biomass supply curves generated from runs of POLYSYS include agricultural residues, forest residues and energy crops, but excludes soy and corn. The biomass supply module sums over all these feedstocks for both the base and high scenarios to provide total biomass supply in million (dry) tons per year as a function of price ($/dt). It also offers Annual Energy Outlook (AEO) biomass supply curves as an alternative option. These curves are then used to estimate the maximum biomass supply (Mdt/yr) available at any price.

These supply curves are also used to calculate the price of biomass as a function of demand, assuming average cost pricing (used for a noncompetitive market; although, the option to use marginal cost pricing is also made available), where each ton of biomass is priced according to the price given by that point on supply curve from zero to the total demand. This ensures that the unit price of biomass is set relatively close to the average cost needed to produce it.

The input biomass demand values over time (GW) are linked in from the biofuels, electricity, and hydrogen modules respectively, and are used in the calculation of the biomass price as a function of the demand level. Embedded in this calculation is a price adder routine intended to increase the cost of biomass feedstock when demand approaches or exceeds the maximum supply level indicated by the supply curves. The price adder allows the user to specify at what point the adder should be supplied (e.g., when demand reaches 90% of max supply). The rate at which the price adder can increase and decrease as a function of the deviation from the "goal" is customizable via a price adjustment curve, which can be a linear or exponential function of the deviation from the goal.

The module also calculates the total amount of unused biomass available (GW), as the difference between maximum biomass supply (per year) available at any price, and total demand (over all sectors—hydrogen, electric, and biofuels). This quantity is then used within the three sectors to constrain the amount of new production capacity that can be added.

Limitations and Major Assumptions

  • It treats the U.S. as a single region, so it ignores regional variations in biomass costs, production costs, biofuels demand, and distribution of biofuels.
  • The total biomass is the sum of agricultural residues, energy crops and forest residues, and excludes soybeans and corn kernels. We assume that cellulosic ethanol, hydrogen from biomass, and power from biomass would all use this same form of biomass
  • The POLYSYS data assumes that transportation costs for corn stover, wheat straw, and switchgrass are at the edge of the field, while the cost for the wood is at the edge of the forest.
  • POLYSYS supply curves go up to 2030. The sector module assumes the 2030 supply curve is the same for years from 2030 to 2050, reflecting that no further land base will become available, and no changes in yield, or the cost of cultivation, harvesting, and transportation.
  • There is no uncertainty or risk in the POLYSYS data except that it provides a baseline and high production scenario. The high production scenario includes energy crops.
  • Biomass is consumed by biofuels (cellulosic ethanol), electricity and hydrogen.

Input Parameters

The key input are the supply curves generated from POLYSYS. The provide the supply of biomass available in million tons of dry biomass (MM bdt/yr) over these indexes:

  • Years 2007 to 2030
  • Prices $20 to $100/ton by $5
  • Crops: agricultural residues, forest residues, soy, corn, energy crops
  • By 10 regions: summed to single U.S. region, as in other SEDS sectors.

Stochastic Inputs:

None

Key Inputs from Other Modules

Demand volume for biomass, as the sum of demand from the following SEDS modules:

  • Electricity
  • Biofuels
  • Hydrogen

Key Outputs to Other Modules

  • Biomass price ($) per dry ton as a function of demand
  • Maximum biomass supply (Mdt/yr) available over time
  • Fraction of unused biomass available (%)

Attachments

Biomass, Biofuels, and Hydrogen Modules: SEDS Review - May 2009

Authors

Max Henrion, Lumina Decision Systems, Inc.

Surya Swamy, Lumina Decision Systems, Inc.

Bob Wallace (formerly at NREL), assisted in providing a spreadsheet of supply curves for biomass, generated from the POLYSYS model